Trump Says ‘I Love Inflation’ About Price Surge; Democratic Party Responds, ‘Every American Should See’ | Today’s news

US President Donald Trump on Wednesday dismissed concerns over a sharp rise in consumer inflation, which hit a three-year high in May, driven mainly by soaring energy prices linked to the ongoing conflict with Iran, AFP reported.

“The numbers were great … I love inflation,” Trump told reporters, a comment pounced on by Democrats who have made rising prices a cornerstone of their campaign to take control of Congress in November’s midterm elections.

The Consumer Price Index (CPI) rose 4.2% year-on-year in May from 3.8% in April, reaching the highest level since April 2023, AFP reported.

Read also | US Iran War News LIVE: MT Jalveer ‘involved in maritime security incident’

Republican House Speaker Mike Johnson later argued that Trump’s comments were misunderstood, while Senate Minority Leader Chuck Schumer argued that the remarks reflected a lack of concern about the economic problems facing American households.

“Trump actually said, I love inflation. On camera. For all of America to hear. His contempt for you knows no bounds,” Schumer wrote on X.

And the Democratic Party posted a new campaign ad with a video of Trump’s comments on its social media account.

“Trump said the silent part out loud – he loves inflation. Every American should see that,” the post read.

The US-Israeli war against Iran, which began in late February, sent energy prices soaring after Tehran retaliated by effectively closing the vital Strait of Hormuz, through which roughly a fifth of the world’s oil and gas normally passes.

Trump also repeated his prediction that inflation would “drop like a rock” after the end of the conflict.

Economists have disputed that claim, with oil prices expected to take months to return to pre-war levels, depending on when hostilities end.

Possible peak

May’s inflation report showed energy prices rose 23.5% compared to a year earlier, with petrol prices jumping 40.5% over the same period. Food prices also continued to rise, with food prices rising 2.7% year-on-year for the second consecutive month of notable gains, AFP reported.

Other categories that saw monthly price increases included health care, personal care products and services, air travel and recreational activities.

Read also | Trump’s approval rating has stalled at an all-time low amid the Iran war

US consumers have faced persistent cost-of-living pressures in recent years as inflation has remained above pre-pandemic levels long after the COVID-19 crisis has subsided.

Prices have been fueled by repeated shocks, including Russia’s invasion of Ukraine, Trump’s tariffs and now the war with Iran.

However, analysts said petrol prices at the pump have stabilized recently, which could indicate a favorable outlook for headline inflation.

“Higher energy prices boosted inflation again last month, but we estimate that inflation has peaked and will decline in the second half of the year,” Nationwide Chief Economist Kathy Bostjancic said.

She added that this is provided there is a “short-term resolution with Iran to reopen the Strait of Hormuz”.

Core CPI inflation, which excludes volatile food and energy prices, came in at 2.9 percent in May, up from 2.8 percent the previous month.

“So far, higher energy costs appear to be translating little into core inflation, outside of airfares,” said Gregory Daco, chief economist at EY-Parthenon, AFP reported.

“No Position to Cut Rates”

The US Federal Reserve is maintaining a long-term inflation target of 2% and its rate-setting committee is due to meet next week to review the economic outlook.

The meeting will be the first under new Fed Chairman Kevin Warsh, who took office last month and is expected to counter pressure from President Donald Trump to cut interest rates.

Despite this, financial markets generally expect the Fed to leave rates unchanged at this meeting. Investors are increasingly pricing in the possibility of a rate hike later this year, a prospect that has unsettled equity markets and weighed on investor sentiment.

Ahead of the war, markets were anticipating a rate cut at the end of the year on the expectation that inflation fueled by Trump’s tariff policy would begin to fade.

Read also | US consumer inflation hit a three-year high in May amid continued tensions in West Asia

But the war complicated the outlook as more Fed policymakers said they were concerned about rising inflation, which the central bank would normally address by raising rates.

“The Fed will not be able to cut rates if this continues,” said Chris Zaccarelli, chief investment officer at Northlight Asset Management.